Australia’s Mirvac Group has entered into agreement to sell a 50% stake in 664 Collins Street in Melbourne for AUD138 million (USD105 million).
The stake is being sold to an investment vehicle sponsored by Morgan Stanley Real Estate Investing (MSREI), with a capitalisation rate of 4.97% given the acquisition consideration.
As part of the transaction, MSREI will fund 50% of the total development costs throughout the construction period, and provide development management, and investment management services for the property.
Mirvac will, on its part of the transaction, provide a five-year rental guarantee on any unlet office or retail space from the date of practical completion.
“Mirvac has a strong history of attracting top-tier capital partners at its assets, and today’s transaction further demonstrates our superior development and asset management capability”, said the REIT’s CEO and managing director, Susan Lloyd-Hurwitz.
Upon completion, 664 Collins Street will provide 26,000 square metres of office space across nine levels.
The Grade A property is 62% pre-leased to tenants that include Pitcher Partners, which has pre-committed to over 9,000 square metres, and ExxonMobil which has pre-committed to 7,100 square metres.
The property is expected to be completed in 2018.
Units of Mirvac Group are currently listed on the Australian Securities Exchange (ASX) at AUD2.27.